Advance Premium Tax Credit (APTC) received in excess of what the taxpayer is allowed typically needs to be repaid. If the taxpayer in question got married during the tax year and their new "tax family" includes an individual with marketplace insurance who received APTC, Part V of Form 8962 may be used to reduce the amount of excess APTC to be repaid.
Why would I use the alternative calculation?
Electing the alternative calculation is optional, but may reduce the amount of excess APTC you must repay. However, not everyone qualifies to use Part V Alternative Calculation for Year of Marriage.
Am I eligible for the Alternative Calculation for Year of Marriage?
To be eligible to use the alternative calculation, you must answer yes to ALL the following:
- Were you and your spouse each unmarried on January 1?
- Were you married by December 31?
- Are you filing a joint return with your spouse?
- Was anyone in your tax family enrolled in a qualified health plan before your first full month of marriage? (For example, if you got married on July 15, your first full month of marriage was August.)
- More APTC was paid during the tax year than should have been paid according to Worksheet 3, found in Form 8962's instructions.
If you do not meet the above conditions, you are not eligible to elect the alternative calculation.
Step one: Learn if there is advance PTC that must be repaid
To accomplish this, report your Form 1095-A(s) within the software without selecting the alternative calculation. After your 1095-A(s) are reported, navigate to the Summary/Print section and select Tax and Credits. Check the "Excess advance premium tax credit repayment" listing for an amount.
Step two: Figuring the entries needed for Part V
Before completing Part V within our software, you must calculate the following:
- Alternative family size
- Alternative monthly contribution amount
- Alternative start and stop months
The alternative family size for the taxpayer and the spouse is the size of each family prior to marriage. If there are no dependents, then the alternative family size for each is 1. Otherwise dependents are added to the alternative family size for whichever family they resided in prior to marriage.
To determine the alternative monthly contribution amount, complete Worksheet I Lines 1 through 7 in Publication 974.
The alternative start month is the first month in which the taxpayer had marketplace insurance while the alternative stop month is the either the last month having marketplace insurance or the month of the marriage, whichever is earliest. For example if a taxpayer and spouse were married in August and the taxpayer had marketplace insurance all year, the alternative start month would be January and the alternative stop month would be August.
Step three: Complete Part V within your return
To complete Part V of Form 8962, please follow the steps listed below.
- Navigate to the Health Insurance section
- Answer yes, then continue
- Verify household members and continue
- Select Alternative calculation for year of marriage (8962, Part V) and complete the applicable boxes using the information you determined for Part V.